The government wants to ensure card payments do not cost merchants much. The situation could be more pleasant for small shops since they have to pay specific fees to the banks and the payment companies when the customers use cards to pay for the items.
This may apply pressure on the card issuers so that more people come into the picture to use their cards. It also showed that greater use of Cashing out small payment information usage fees would benefit not only shops but the economy as well. Yet, they do not want fees to be high on small merchants. The new cashing out fees were set to bring fairness whereby those who will be charged will be both customers and shops.
Background on: Cashing out small payment information usage fees in Korea
Payment cards have enjoyed quite a popularity in South Korea, especially in the past few years. Cashing out small payment information usage fees can be used for products and services that are basic needs in life as well as luxury expenses. However, the cost of using cards to make payments has raised a lot of issues, especially for merchants.
This made card payments very costly for these small businesses, such as fast-moving convenience stores, cafes, and other companies that offer various low-value products and services. This significantly impacted the net profits since all the fees reduced the overall profit that could be generated. Some shops even opted out of accepting cards that would bring in low revenues solely due to the costs involved.
Who Will Pay the New Usage Fees in Korea?
In Korea, there is a new rule about fees for Cashing out small payment information usage fees for certain things. These fees are called usage fees. The big question is, who will have to pay these new usage fees? The usage fees apply to companies and services that use things like internet data, cloud storage, videos, music, and other digital content.
For example, companies that stream lots of videos or music online could be charged usage fees. Companies that store large amounts of data on cloud servers also need to pay. However, regular people who use the internet, watch videos or listen to music at home would likely not need to pay any new usage fees directly.
The Goal of Sharing Payment Costs
Comprehensives have identified that paying a portion of the cost of payment is intended to help to make things balanced. That means owing to the principle of division of costs, it is not a ‘one for all’ or ‘all for one’ kind of situation.
Reduced costs are more than a restaurant experience or even a food choice that takes place at restaurants. It can cover rent, utilities, transportation, and anything else related to the lease or tenancy of the property. It means that if there are a number of people or entities who will enjoy the benefits of something, then all of them should contribute a proportional amount.
Potential Benefits for Merchants and Customers
For businesses that sell products or services, which we call merchants, some potential benefits are:
- They can make more money by reaching more customers online or through apps.
- It could help them better understand what customers want so they can sell the right things.
- New technology may allow merchants to operate more efficiently and at lower costs.
For customers, who are the people buying products or services, potential benefits include:
- More choices and options when shopping online or through apps.
- Easier and more convenient ways to purchase things they need.
- Lower prices if merchants can save on costs.
- Better customer service would be achieved if merchants could collect feedback better.
Final Thoughts
Korea’s new system for 소액결제 정보이용료 현금화 aims to distribute costs more fairly between merchants and customers. Previously, small businesses like convenience stores and cafes bore a significant burden from credit card transaction fees, impacting their profits.
The new fees apply mainly to large companies that use vast amounts of digital services and content rather than individual consumers. At the same time, customers may see advantages like more choices, better service, and even lower prices if merchants can operate more efficiently. While the specific impacts remain to be seen, the overall goal is to create a more balanced system that does not overburden any one party with the total costs of facilitating digital payments and commerce.
